2003 March 10

Plass says his firm has developed software, to be available in the second quarter of this year, enabling file-sharing providers to capitalize on the unused computing power of their members. That in turn would allow them to raise money to compensate artists for the use of their material, he said.

He said the software, known as ThankYou 2.0, enables a peer-to-peer file-sharing client to turn the computers of digital music fans into a node in a network of computers linked through the Internet.

By leasing out the unused processor power on those multiple PCs to research facilities — a technology known as “grid computing” — the software, Plass said, could generate revenues that would be distributed back to the musicians.

The essence of AOL Time Warner’s Mystro TV is a technology that uses a cable system itself to provide viewers capabilities similar to computerized personal video recorders like TiVo: watching programs on their own schedules, with fast-forward and rewind. But it also lets networks set the parameters, dictating which shows users can reschedule, and it also creates ways for networks to insert commercials.

… But the demonstration also stresses that the Mystro TV system offers networks and studios considerable advantages over in-home personal video recorders such as TiVo or ReplayTV, which is made by Sonicblue . Not only can networks determine the availability of their shows, but Mystro TV prevents consumers from making, storing or sharing copies (something ReplayTV allows). Mystro also does not automatically skip commercials or even include a fast-forward button that leaps past one 30-second commercial at a time (another feature of ReplayTV.)

While a program is paused or rewinding, networks can insert new commercials during the process or display them around the periphery of the screen. On the CD-ROM demo, for example, a viewer pausing “Charmed” might see a commercial for Special K or Pizza Hut.

In a first for the music industry, a major record label will introduce new songs on a new video game, not the radio. The goal is to lure young, male consumers into buying entire CD’s when they are released to stores up to four months later.

The split highlights a real difference between software and hardware manufacturers. While they may be longtime allies on everything from free trade to mandatory stock option expensing and broadband implementation, software companies are more at risk to Internet piracy than hardware makers. That means they’re more eager to endorse laws that intend to thwart copying, even if their side effects hinder research and punish heretofore-legitimate activity with hefty prison terms.

…To its credit, Intel has taken a leadership position in Silicon Valley in pointing out the problems with expansive copyright proposals. A year ago, Intel co-founder and Vice President Les Vadasz correctly warned the Senate that a proposal to implant copy-protection technology in nearly everything with a microprocessor would have dire side effects.